Accidental master trusts
The new Master Trust Authorisation legislation aims to improve the standards for master trust schemes. This legislation was primarily aimed at master trusts being promoted for large-scale commercial use.
However, some multi-employer schemes will not appreciate that they are a master trust and that they will have to comply with the new standards. Other schemes may be aware of the changes but are unsure of how to proceed.
"From 1 October 2018, existing master trusts have six months to apply for authorisation in order to continue operating, and this process contains detailed and complex requirements."
The first thing for trustees of a multi-employer scheme to do is check whether their scheme does classify as a master trust. If it does, the trustees and participating employers should urgently consider their strategic approach.
We have already helped trustees and employers deal with this issue, including advice on replacement scheme structure, scheme provider and communicating with members.
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